Health service productivity has fallen by up to 8% since 1995, official figures show.
Spending outstripped improvements
The Office for National Statistics found the costs of providing services had outstripped the value of services in cash terms.
Conservative Shadow Chancellor Oliver Lewtin said the figures showed government had built waste and inefficiency into the health service.
But Health Secretary John Reid said the statistics were "absurd".
He said the figures ignored things like value for money, quality of treatment and care and health improvements.
The ONS looked at spending within the NHS between 1995 and 2003.
It concluded that productivity had fallen by between 3% and 8% during this time, with an average drop of up to 1% each year.
Output grew by 28% but spending grew by 32-39%.
Oliver Letwin said the figures were damning.
"They show that, on every one of the measures chosen by the statisticians, NHS productivity has declined under this government.
"The simplest statistic of all - that spending on hospitals alone has risen five times as fast as the number of hospital treatments - tells the whole story of the colossal health inflation, waste and inefficiency that Gordon Brown's bureaucracy has built into the health service."
But Mr Reid said it was absurd that the ONS measure of productivity did not include:
The increasing amount of treatment provided by primary care professionals
The long-term benefits of increases in expenditure on drugs, such as cholesterol-lowering statins
Quality improvements, such as reduced waiting times and death rates from the big killer diseases - heart disease and cancer
Improved performance in terms of speed of ambulance transfer
He said: "It's absurd that the current measure of productivity does not cover the range of massive improvements that are being seen across the NHS.
"The NHS is moving from a sickness service to a wellness service. The measure of its success needs to reflect the quality of care that's now being provided.
"The NHS has delivered real quality improvements including shorter waiting times, reductions in mortality rates and better quality consultations.
"For example, 6,000-7,000 lives are being saved each year thanks to more statins being prescribed.
"Longer and higher quality consultations with GPs mean people with chronic illnesses are receiving better care and staying out of hospital.
"While the ONS productivity measure is better than previous measures, more improvements are needed since it is still outdated and lags behind NHS
improvements," he said.